U.S. Markets close in 2 mins

Is Mullen Group Ltd. (TSE:MTL) Overpaying Its CEO?

Simply Wall St

The CEO of Mullen Group Ltd. (TSE:MTL) is Murray Mullen. First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.

Check out our latest analysis for Mullen Group

How Does Murray Mullen's Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that Mullen Group Ltd. has a market cap of CA$974m, and reported total annual CEO compensation of CA$570k for the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at . We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. When we examined a selection of companies with market caps ranging from CA$527m to CA$2.1b, we found the median CEO total compensation was CA$2.2m.

Most shareholders would consider it a positive that Murray Mullen takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. However, before we heap on the praise, we should delve deeper to understand business performance.

The graphic below shows how CEO compensation at Mullen Group has changed from year to year.

TSX:MTL CEO Compensation, December 24th 2019

Is Mullen Group Ltd. Growing?

Over the last three years Mullen Group Ltd. has shrunk its earnings per share by an average of 71% per year (measured with a line of best fit). In the last year, its revenue is up 6.0%.

Few shareholders would be pleased to read that earnings per share are lower over three years. The fairly low revenue growth fails to impress given that the earnings per share is down. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. It could be important to check this free visual depiction of what analysts expect for the future.

Has Mullen Group Ltd. Been A Good Investment?

Given the total loss of 47% over three years, many shareholders in Mullen Group Ltd. are probably rather dissatisfied, to say the least. So shareholders would probably think the company shouldn't be too generous with CEO compensation.

In Summary...

It looks like Mullen Group Ltd. pays its CEO less than similar sized companies.

The compensation paid to Murray Mullen is lower than is usual at similar sized companies, but the eps growth is lacking, just like the returns (over three years). While one could argue it is appropriate for the CEO to be paid less than other CEOs of similar sized companies, given company performance, we would not call the pay overly generous. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Mullen Group.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.